Stocks Record Modest Gains; Dow Adds 4.40
Stock prices closed modestly higher after an uneventful session on Wall Street Thursday.
The Dow Jones average of 30 industrials rose 4.40 to 2,320.45.
Advancing issues outpaced declining issues by a margin of about 11 to 7, with 940 stocks up, 610 down and 409 unchanged on the New York Stock Exchange.
NYSE volume totaled 182.95 million shares, against 182.63 million the previous session.
Analysts said there was little news to influence the overall market, although some developments affected the performance of individual stocks.
The market began the day with a buying spurt, but it slipped lower at midday before moving back onto the plus side.
“It’s part of the backing and filling that will take some time” before the market resumes its expected upward trend, said Hildegarde Zagorski, a market strategist with Prudential-Bache Securities.
Market Showing Resilience
Other analysts also were upbeat about the market.
“The market has a fairly good tone and is recovering normally from the scare on Monday,” when the Dow Jones average of 30 industrials dropped more than 57, Robert Colby, an analyst with Smith Barney, Harris Upham & Co., said.
Thursday’s results were “a continuation of the strength shown Wednesday,” said Michael Metz, an analyst with Oppenheimer & Co. in New York. “People are encouraged by the resilience of the market,” although they were not buying with conviction, Metz said.
On Wednesday, following the announcement of an increase in the prime lending rate, the market was lower for much of the session but began to recover shortly before the close.
“People are looking for things to buy” after the market’s earlier drop, said Metz, and they responded Thursday to analysts’ recommendations on particular stocks.
“There’s plenty of money on the sidelines,” he said.
For example, Morgan Stanley advised its customers Thursday to buy Digital Equipment instead of IBM. Digital rose 2 5/8 to 164 7/8, while IBM dropped 3 1/8 to 148.
IBM unveiled a new generation of personal computers Thursday, but analysts said investors had already done their buying in anticipation of the announcement.
Tech Stocks Advance
Topping the NYSE most active list was Revlon, which added 2 1/8 to 21 3/8. On Wednesday, the company’s dominant stockholder launched a bid to take the cosmetics giant private at $18.50 a share.
Several other technology stocks fared well. Unisys rose 1 to 98 and Texas Instruments jumped 2 1/2 to 193.
Other big winners on the day were Teledyne, which shot up 7 3/8 to 331 7/8, and Upjohn, which rose 3 to 123.
Among the big losers was Ford Motor, which fell 1 1/8 to 85 7/8.
Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 214.23 million shares.
Large blocks of 10,000 or more shares traded on the NYSE totaled 3,722, compared to 3,737 Wednesday.
The NYSE’s composite index rose 0.72 to 166.76.
The Wilshire index of 5,000 equities closed at 2,945.234, up 17.935.
Standard & Poor’s index of 400 industrials rose 1.84 to 338.97, and S&P;’s 500-stock composite index was up 1.24 to 293.63.
The American Stock Exchange market-value index was up 3.59 at 335.24. The NASDAQ composite index closed at 432.07, up 3.73.
Bonds React to Dollar
In the credit markets, government bond prices slumped, giving up early gains as the dollar dropped again in foreign exchange.
The Treasury’s key 30-year bond, up about 1/2 point at midday, fell nearly 1 point in late trading, or about $10 for each $1,000 in face amount. The yield jumped to 7.94% from 7.87% Wednesday.
The dominant influence over the bond market again was the dollar, which tumbled in late trading following reports that U.S. Trade Representative Clayton K. Yeutter, in response to questioning by a Senate committee, admitted that further declines in the dollar could help the nation’s trade deficit.
In the secondary market for Treasury bonds, prices of short-term governments fell about 5/32 point; intermediate maturities fell in the range of point to 19/32 point, and 20-year issues were off 7/16 point, Salomon Bros. said.
The movement of a point is equivalent to a change of $10 in the price of a $1,000 bond.
In corporate trading, industrials were down point and utilities fell 5/8 point in quiet dealings.
Among tax-exempt municipal bonds, general obligations and revenue bonds fell 5/8 point in moderate trading.
Yields on three-month Treasury bills were up 4 basis point to 5.52%. A basis point is one-hundredth of a percentage point. Six-month bills rose 7 basis points to 5.78%, and one-year bills were up 6 basis points at 5.84%.
The federal funds rate, the interest on overnight loans between banks, traded at 6.625%, down from 6.188% Wednesday.
